As most economists predicted, the Federal Reserve Board has cut interest rates by a quarter of a point to 4 1/2 percent.
The FRB was concerned about the “housing correction” spreading into the greater economy, according to their statement:
Economic growth was solid in the third quarter, and strains in financial markets have eased somewhat on balance. However, the pace of economic expansion will likely slow in the near term, partly reflecting the intensification of the housing correction. Today’s action, combined with the policy action taken in September, should help forestall some of the adverse effects on the broader economy that might otherwise arise from the disruptions in financial markets and promote moderate growth over time.